By Tiernan Ray

Shares of Yelp (YELP) are up $5.53, or almost 10%, at $63.8, reversing losses of 8% immediately after the report yesterday afternoon of better-than-expected results.

Revenue topped expectations and the net loss per share of 4 cents was not as bad as the six cents the Street had been expecting. The company’s outlook for this quarter’s revenue was a little better than consensus as well, and Yelp raised its year outlook above the prior range.

The stock has gotten three upgrades this morning, from Piper Jaffray, RBC Capital, and Macquarie. Aside from that, estimates are being tweaked a little bit at various shops, and price targets are mostly staying in place.

The focus today is on Yelp as a growth name in the wake of Twitter’s (TWTR) disappointing report Tuesday afternoon, and after a haircut to the stock: it is down 8% this year, versus an 11% rise for Facebook (FB), for example.

RBC’s Mark Mahaney, raising his rating to Outperform from Sector Perform, and setting an $88 price target, writing, ” We have stated for some time that we would be constructive on YELP in the event of a pullback. A two-month 40% correction classifies as a pullback. Further, at ~8X P/S and ~30X EV/EBITDA, we view YELP valuation as more reasonable.”

The Market may not want to pay up for quality growth now, but we believe it almost inevitably will again. More importantly, as Fundamentals Analysts, we view the probability of the 3rd consecutive year of 60%-70% revenue growth as intrinsically impressive and reflective of a very large TAM and consistently strong execution. We also see consistent 60%+ revenue growth in Yelp’s oldest cohorts as a convincing sign of the durability of YELP’s future growth rate. We can also identify at least two growth gap-up scenarios. First, Yelp’s younger cohort markets (e.g. 2009-2010) are generating revenue dramatically below the level of Yelp’s older cohort markets (e.g. 2007-2008). And second, while Yelp’s International markets are generating 23% of the company’s total traffic, they are generating only 3% of the company’s total revenue. Strategically, we continue to believe that YELP would be a logical fit for at least a half-dozen Large Cap ‘Net companies, all of whom would be logically interested in building out their Local presences.

Mahaney raised his estimates for this year to $94.8 million and 60 cents EPS from a prior $93.8 million and 54 cents.

Piper’s Gene Munster, raising his rating to Overweight from Neutral, and assigning an $80 price target, writing that “Over the past few quarters, our primary issue with YELP has been valuation,” but now, “given the ~40% pullback in shares over the past month, we believe now is the time to own Yelp.”

Munster’s not worried about the higher spending outlook from the company:

We are comfortable with the company’s theme of investment as it has been the trend with many Internet leaders (LNKD, FB, etc.); thus we do not believe the EBITDA guidance, which we view as in- line for the year, is disappointing. Second, we believe the full negativity around the reported FTC letter regarding customer complaints has been fully priced into shares at these levels. Third, we view our proprietary analysis on Yelp vs Google reviews gives us incrementally more confidence in Yelp’s competitive position despite Google’s investment in local over the past few years. Finally, we believe that the stock’s valuation has retreated to levels close to where the company may become more attractive as an acquisition target for some larger mobile competitors and platforms, which could create a floor in shares around current levels.

Munster raised his estimates for this year to $363.1 million and 24 cents per share from a prior $355.6 million and 22 cents.

SunTrust Robinson Humphrey’s Rob Peck reiterates a Buy rating, and an $85 price target, and like Mahaney, he is pleased with the metrics:

Local Business Accounts up ~66% (inclusion of SeatMe added ~2 points) to 74K, a little better than consensus when stripping out SeatMe. Claimed Local Business Locations up ~45% to 1.6M, spot in- line with consensus. Reviews up ~46% to 57M with both U.S. (+37%) and International (+210%) solid. Total traffic (web + app) continued to slow to 28% from 37%, though known per comScore and at 143M uniques law of large numbers a factor. Mobile uniques up 52% with mobile now 60% of searches. Cohort analysis indicates continued steady robust review and ad revenue growth and no signs of saturation in Yelp’s most mature markets.

The business is still “early in the story,” he thinks, and international usage is set to become more important over time:

The company’s peripheral Platforms, Deals, and SeatMe initiatives are still nascent, the core U.S. market is the engine now but we think International could take the reins and sustain growth in out-years, and we believe the company has a long runway to increase monetization through migration to auction based pricing (CPC offering still small). 2014 guidance does not include any contribution from the YP partnership, which has not been implemented yet.

Peck raised his 2014 revenue estimate to $366 million from $358 million, but keeps his 51-cents EPS estimate intact.

Shebly Seyrafi of FBN Securities reiterates an Outperform rating, but cuts his price target to $100 from $110, urging investors to look past any complaints of slowing growth and focus on the progress in mobile usage and the relatively inexpensive valuation:

Although bears may point to slowing growth in unique visitors (up 30% Y/Y), large investments in S&M, and still-paltry international revenue (3% of revenue, down from 6% the year before), the company is raising its annual guidance by roughly $10M (we think helped by recent deals with Yahoo and YP as well as the slight beat in FQ1), it is growing its mobile base quite well (mobile unique visitors grew 52% Y/Y), and ALBA (active local business account) grew a very strong 65% Y/Y. With shares trading at an EV/revenue (C2015) ratio of 7-8x, down from 11x when we initiated coverage in January, now is an especially attractive entry point for a rapidly growing local pure-play with a large TAM (the local advertising market is expected to be $150B by 2017).

Seyrafi raised his 2014 estimates to $366 million and a 3-cent loss per share from a prior $357 million and a 7-cent loss, on a GAAP basis. His non-GAAP EPS number is 54 cents per share.

B. Riley & Co.’s Sameet Sinha reiterates a Neutral rating, and a $62 price target, writing that “This is the second quarter in a row that revenue out-performance was from Brand advertising (sub 15% of revenue), while the core Local advertising growth rate is slowing down.”

Sinha writes that he “remains on the sidelines as the out-performance is coming from a non-core product and 2015 could require significant investment in International markets, which were down 30% Y/Y.”

Sinha cut his revenue estimate for this year to $87.6 million from $89.6 million, but raised his Ebitda estimate to $57.6 million from $56.5 million.

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.